SCM $300$

Lab #$4$

RELIABILITY

A certain company produces $8,000$ tables per year in a three$-$step process. The cost to produce one table is $$135.$

The three steps in the process employ machines with the reliabilities listed here:

Step $A-0\mathrm{.}985,$ Step $B-0\mathrm{.}980,$ Step $C-0\mathrm{.}860$

Question #$6$

What is the reliability of the present process? Provide reliability to three digits.

$(0\mathrm{.}985)(0\mathrm{.}980)(0\mathrm{.}860)=0\mathrm{.}83,83\%$

Question #$7$

How many defects does this process presently produce annually? Round up to get a whole number.

Question #$8$

The company can choose to buy a back$-$up machine for Step C for an additional $$27,000.$ The back$-$up would also have a reliability of $0\mathrm{.}860,$ just like the one that is presently used. If they decide to get this back$-$up machine, what will the new reliability of the system be$?$ Assume that once a machine malfunctions, the process continues to produce product, acceptable and defective. THREE decimal places.

Question #$9$

With the back up in place, how many defects will the process produce annually given the same demand rate?

Question #$10$

How much do they stand to save this year if the cost of the back$-$up machine is included in your calculation? Remember to include the cost of the back$-$up into your calculations.